When it comes to CES, you probably think hardware. Gadgets, smartphones, fancy cameras and such. And while this year’s brought plenty of new toys, we’re seeing a growing emphasis on the software running on these gadgets. The convergence of high speed internet, connected devices and consumer demand for services has put a new spin on CES as device makers seek new ways to gain a leading edge.
According to Consumer Electronics Association research director Shawn DuBravac, 2013 is the year of the app, the year when services focusing on consumers take center stage.
“We’re starting to enter a second digital decade,” DuBravac says. “It’s not about acquisition of digital products, it’s about taking advantage of those products.”
Though there are countless companies that showcased new hardware at CES this year, it can’t be ignored that more companies are now focusing on what’s inside their gadgets rather than just bringing the shiniest device to the show.
Here are five reasons why content and services are getting the attention at CES 2013:
A smartphone or any other device is not unique until a user has tweaked it to his or her personal preference. And that’s made possible by services or features on devices. And thanks to an increasing amount of data companies are able to gather on an individual, we’ve come to expect more personalization from the services we use. The most regularly applied form of personalization is recommendations, something Amazon has seemingly mastered.
But as consumers become more comfortable with the idea of sharing their purchase data and preferences, the more overlapping buckets each individual will fall into. Those services that are able to use this to their advantage through advanced analytics will be able to provide the best recommendations, becoming truly personalized by anticipating our needs and desires. Netflix has always worked towards a high level of personalization for their user base, revealing a new feature this week. Users can now create multiple profiles within a single Netflix account, so overlapping preferences don’t interfere with Netflix recommendations or saved queues.
The Internet of Things
The tech leaders most vested in the Internet of Things used CES 2013 to debut the Internet of Things Consortium – a group of people whose mission is to foster and support the growing number of internet connected devices for consumers. Sure, we have a rapidly increasing number of smartphones and tablets out there, but more objects in our every day lives will soon become connected, able to give off a trail of data exhaust all their own. It’s a new form of value being layered onto the devices we use every day, enabling more data exchange and supporting a rising number of services as a result.
“As we will see this week, there are a number of amazing ‘Internet of Things’ solutions in development from both start-up companies and established consumer electronics corporations,” IoT Chair Jason Johnson said. “Be it a new game controller, a fitness tracker, a home thermostat or an automatic door look, the future is bright for people building real life connected things.”
The trend is also aiding the self-quantified lifestyle where personal data tracking has become the ideal interface for consumer services. At CES this year several companies, from Fitbit to Withings are competing for consumer attention, combining wearable tech with personalized services to gain a leading edge.
Data is the new currency
We’ve heard this phrase a lot, especially from entrepreneurs, but what does it really mean? It’s simple enough to explain when it comes to consumer data: it’s comprised of their retail preferences, the amount of time spent on a service, feedback for a product or their purchase behavior. Companies use these data to improve their services and products, and some even sell user data to third parties, including advertisers.
What that means is new services can be an opportunity to reel in cash, and cultivate a competitive advantage in the market. We’ve seen this with cloud services, all competing for consumer accounts. Many offer free storage as bait, charging different fees for similar services across a range of devices. It’s become a competitive sector for Google, Apple, Dropbox and others.
When it comes to third party involvement, the interpretation of data as a currency is more literal. While any company has its own internal data sets, supplementing that with outside data can provide a better foundation of information for consumer analysis. Social media has contributed significantly to this trend, providing a wealth of publicly available data that’s rich with consumer tags. A real-time data feed from Twitter can help a retailer improve their products and services by incorporating that feedback into their R&D, sales and marketing and other departments, hastening the time and money spent on researching and bringing a product to market.
Saturate the market
There are a lot of new devices from numerous companies being released each year. And for some of these manufacturers, it’s quite hard to compete with the likes of Samsung and Apple. So in order to penetrate the market successfully, some are focusing more on what’s inside a device or a product rather, aside from making sure that devices are aesthetically pleasing to consumers’ eyes.
Take HTC for example. They offered 25GB of free Dropbox storage to those who purchased an HTC One X, but it was quickly trumped by Samsung offering 50GB of free Dropbox storage for two years. Some companies offer perks when they upgrade the OS of their device to the latest version, but not all the devices can support the latest mobile OS, so if users want a whole new mobile experience, they have no choice but to purchase a new device.
Un-saturate the market
It seems there’s a never-ending ream of devices being released on a daily basis, completely flooding the market with gadgets. So even if companies want to introduce more devices to consumers, they also have to consider the fact that a shiny new toy won’t make it in a highly competitive, very saturated market. These days, not everyone can afford to buy a new tablet, smartphone or Ultrabook with every release, especially when the “new” device doesn’t really offering anything new except for its name.
So now, companies are introducing services that can work on existing devices that consumers already have, without the need to buy the latest product. ooVoo just introduced a new feature to their service called Watch Together which allows 10 people to watch the same thing, search YouTube videos and anyone of the chatters can adjust video playback when they want to. Users don’t need to buy anything new, it’s just a new feature.